A new analysis from the former chief economist for the White House Council of Economic Advisers found that the large increase in immigration in recent years is a major part of why the U.S. has recently experienced extraordinary economic growth compared to peer nations.
Economist Ernie Tedeschi, now a research scholar at Yale University, writes in a new report that the rise in the immigrant population since 2020 accounts for at least a fifth of U.S. growth since then. That goes a long way toward explaining why the U.S. has grown almost twice as fast as the next best performer among G7 economies since the pandemic. Furthermore, he notes, “absent immigration, the US labor supply would have shrunk by 1.2 million since 2019. Instead, it expanded by 2 million.”
The arrival of a large number of undocumented immigrants has helped fuel yet another round of American exceptionalism in the global economy.
That’s a big deal. The report is a reminder of a truism among economists: Immigration is good for the economy, helping bring in new laborers who create goods and services, spend money on goods and services, contribute to the social safety net, and help spur innovation.
But the report also illustrates the odd tension between immigration as a political issue and immigration as an economic issue. Why is it that an economic winner is a political loser?
Currently, President Joe Biden — and much of the media across the political spectrum — has treated the large number of migrants crossing the U.S.-Mexico border as a major political crisis. Some of that is because the system for receiving migrants is disorganized, out-of-date and lacks the resources to process the large numbers coming through, especially those seeking asylum. That’s an important issue that deserves serious attention.
But unfortunately, the migrant “crisis” as broadly understood in mainstream conversation — especially on the right — primarily stems from the fear that “floods” of new migrants are inherently destabilizing and dangerous for the U.S.
Trump hammers Democrats almost daily over the issue, painting migrants as subhumans and “animals” carrying disease and crime to the country. Influential right-wing figures like Tesla CEO Elon Musk warn that the influx of migrants is a Democratic conspiracy designed to fundamentally remake the political and social makeup of the U.S., and argue that too many migrants will “crush all essential services.”
Most Democrats’ response to this has been defensive, implicitly affirming the notion that large migrant populations should be seen as a concern. The president and much of his party have been promising stronger enforcement at the border and making unprecedented concessions to Republicans on hawkish immigration legislation. Biden has used more forceful, at times almost Trumpian rhetoric about shutting down the border.
But this report is a reminder that the arrival of large number of undocumented immigrants has helped fuel yet another round of American exceptionalism in the global economy. Biden’s relaxation of Trump’s harsh immigration policies has not proved burdensome to the U.S. economy, but has served as a boon to it. As Semafor’s Jordan Weissmann points out, Tedeschi’s research comes around the same time as research from the Brookings Institution’s Hamilton Project suggesting that recent revisions in the estimates of undocumented migrants entering the U.S. help account for how employers were able to keep hiring while policymakers were able to get inflation under control.
It is difficult to conceive of Biden, with his track record of risk aversion on immigration policy, shifting his rhetoric radically on this matter. Which is a shame, because Democrats are not going to win the game of trying to match or out-hawk Republicans on immigration. Sure, some moderate degree of beefed-up — and humanely executed — border enforcement may not be a bad policy idea for Democrats to embrace. But Democrats will be strongest when they work with the truth: Migrants, as they have through all of American history, enrich the U.S. Democrats shouldn't be afraid to say it.
